Develop and document HR processes

Overview
Managing HR systems is like continuous contingency planning looking at
the current situation and getting ready for what might happen. And
developing procedures and polices, while ensuring management buy-in, is an
essential part of being an effective HR manager. This resource explains how
to review existing processes, and develop and implement new procedures
and policies across a range of HR service areas including recruitment,
separation/termination, industrial relations, performance management, and
remunerations management.

Key terms

Benchmarking
A management and evaluation approach that allows you compare the state of
your own HR processes against those of other organisations. Often used to
identify the improvement expected and/or gained from changing or
outsourcing a process.

HRMIS
Human Resource Management Information Systems; computer systems to
collect and analyse information to assist in the making of timely HR
management decisions, examples are databases, spreadsheets, information
networks

Policy
A broad statement of intent that provides a framework in which staff should
operate and act.

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 Procedure
A set of rules, guidelines, or steps that specify how staff should operate and
act; may also include tools and forms to be used by staff.

SWOT
SWOT is a planning tool used to clarify an organisations strengths,
weaknesses, opportunities and threats.

Trialling
The process of evaluating a new or changed process or a tool in practice,
often done on a small scale prior to a wider implementation

When to develop processes?

The process of managing HR systems is like continuous contingency
planning looking at the current situation and getting ready for what might
happen, all the time being ready to improve your processes and align them to
organisational goals. This means that:
Reviewing and developing HR policies, procedures and tools should
be part of your continuous improvement process in HR.
and
Major reviews may need to occur in response to new organisational
directions and strategies.

Steps in developing HR processes

The key steps in developing a new or improved HR process, in a general but
not strict order, are:
1. Research the elements of best practice in HR systems.
2. Research the legal requirements for HR practice in your
organisation.
3. Identify relevant organisational goals and business plans.
4. Identify problems and potential improvements in existing HR
processes .
5. Consult with stakeholders in the organisation. Ask for, and use,
feedback from existing employees and their managers about the value
and efficiency of processes.
6. Identify and brief a pilot group so you can conduct a trial.
7. Develop options for policies, procedures and tools.

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 8. Develop an evaluation plan for the new process.
9. Present these options to stakeholders, and gain sign-off.
10. Develop an implementation plan (including strategy for
communication, training and support).
11. Conduct a trial with the pilot group.
12. Make post-trial modifications to the process and/or tools.
13. Commence full scale implementation.

The extent of effort you put into each of these steps would be determined by
the legal implications, organisational outcomes and risk management issues
that relate to your new or changed HR process.

Strategic directions
Strategic directions of organisations are often expressed in things like a
vision, mission statement and business goals. They are guides to management
action within the organisation. They provide direction on what the
organisation wants to do, while further down the line objectives and
procedures outline how to do it. Well-designed HR practices will help the
organisation achieve its goals by taking into account broader management
issues such as budgets, staffing, growth strategy, production and sales. Being
able to demonstrate this link can be an effective argument on behalf of your
HR tactics.

Think

How well do you know the strategic directions of your organisation? An

understanding of thing like organisation vision, mission and strategic goals is
an essential element in developing HR processes.

Identifying current practices

Before you can develop new processes for an HR service area, you will need
to audit existing conditions to determine exactly what your organisation does
now, and why. This should include reviewing current policies and
benchmarks, as well as identifying potential changes in conditions.

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 Start by gathering information about your organisations current processes,
and the rules and regulations you must comply with. Once you have
established the boundaries, you can set your goals for change as high as
circumstances will allow.

Gathering information

Gathering facts quickly and at low cost

Start with a simple checklist of what you want to know.
Ask immediate associates, managers and colleagues to share their
experiences.
Check with other sources such as HR staff, union representatives, the
company lawyer, departmental managers, the internal auditor and
training manager.
Refer to company documentation such as policies, procedure
manuals, or documents prepared for accreditation of quality
endorsement.

External sources for your research

These may include:

the Internet you can look up Federal and State legislate or you
could search for information on benchmarking HR practices
HR organisations such as AHRI (Australian Human Resource
Institute) they may be able to suggest similar organisations known
for best practice.
employer associations such as AIM (Australian Institute of
Management) they prepare labour and industry surveys and data
your national, state, or local library university libraries usually have
considerable published information about law and industrial relations
government departments dealing with industrial relations,
employment, law, management, economics, or statistics these are a
good source of workplace relations data.
government publishers and bookshops they stock recent reports on
industrial relations or copies of Acts of Parliament
unions they often have strong research facilities and extensive
libraries.
HR consultants they have a wealth of experience and are often
willing to help an enthusiastic learner.

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 What to consider when gathering information

In gathering your information, there will be three main issues to consider:

1. internal and external circumstances unique to your organisation or
industry
2. the organisations plans and strategic goals (both long- and short-
term)
3. human resource operations.

You will also have to consider:

the way the organisation functions and management responsibilities
especially in relation to departmental authority to hire, dismiss or
change employment contracts
stakeholders' interests.

Research

What current practices exist within your organisation? Try to document

both official and unofficial HR policies and procedures that exist in your
workplace. You might focus on one HR service area such as recruitment,
separation/termination, industrial relations or performance management.

Evaluation tools and techniques

There are many ways you can evaluate current HR practices. Two quite
different methods are SWOT analysis and an audit using a diagnostic
checklists.

SWOT analysis
A SWOT analysis is a good starting point when assessing current practices
within the organisation. If you arent familiar with the expression, SWOT is a
planning tool used to clarify the organisations:
Strengths
Weaknesses
Opportunities
Threats.

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 The strengths and weaknesses usually refer to issues and conditions within
the organisation, while opportunities and threats usually refer to pressures
and demands from outside the organisation.

Outdated processes are a common weakness in business activities. It may be

some time since your organisation published its policies, or revised and
updated their procedure manual. As a result, staff have started to do things
their own way, with new employees bringing with them new ideas and
differing practices that dont really fit.

Alternatively, technology and finances may have changed the world outside
your organisation. Are these changes to be seen as threats or opportunities
for the organisation?

Think

What is there in the unwritten rules and corporate culture that might
influence your ability to implement HR processes? You should include
things like this in your SWOT analysis.

Audit using a diagnostic checklist

For a different perspective on current HR processes, you can conduct an
internal audit using a diagnostic checklist of best practice features and
criteria for evaluation.

You can use this checklist to evaluate the processes that your organisation
has in place and the results will point you to any changes that need to be
made.

The features in the following table test the strength of different parts of the
organisations current HR practices. This list isnt complete, but it covers
many of the points necessary to assess the value of your processes and
develop better ones.

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 Table 1: Features and criteria to evaluate current HR processes and tools (2 cols)

Best practice Criteria Result

feature

Acceptance Are users aware of the existence of this

testing process/tool, and do they use it? (This is
formal testing conducted to determine
whether or not a HR system satisfies its
users.)
Accessibility Can your users find this process/tool when
they want it? Do they avoid it if they can?
(Measure the degree to which the document
helps the users.)
Accuracy Are many mistakes are made with the use of
this process/tool? (Measure size or frequency
of errors caused.)
Adaptability Is this process/tool versatile? Can your users
apply it to more than one event or situation?
Auditable Can you record information concerning
transactions performed using the
process/tool? Can a trail be followedif
anything changes, will the decision-making
process be recorded?
Clarity Is the tool written in plain English?
Confidentiality Does the process/tool prevent unauthorised
disclosure of information?
Dependability Can you rely on the service this process/tool
delivers?
Error handling Is this process/tool checked for errors? Can
mistakes be corrected and the system returned
to normal operations?
Latency Is this process/tool designed to help the user
manage the timing of events effectively?
Maintainability Can the process/tool be modified to correct
faults, improve performance or other
attributes, or adapt to a changing
environment?
Openness Does this process/tool comply with overall
quality assurance standards?
Robustness Is this a strong process/tool? To what degree
can it function correctly in the presence of
invalid inputs or stressful conditions?
Safety Have the outcomes of this process/tool been
widely discussed with stakeholders? Does it
help to minimise risk?

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 Best practice Criteria Result
feature

Scalability Can the process/tool be modified to deal with

different sized problems with easebe it a
large scale downscaling of staff, or
termination of an individual worker?
Security Does the process/tool allow sensitive
information to be managed, protected and
distributed well?
Simplicity Is the process/tool easy to use? Does it have a
straightforward, easy-to-understand design
and implementation process?
Tone Does the language of the document show
consideration for the users of the form, and
encourage them to display courtesy in any
replies?
Traceability Can a relationship be established between this
and other tools, or between different parts of
the same tool, where there is a cause and
effect relationship?
Training Are provisions in place for users to learn how
to develop, maintain or use the process/tool?
Vulnerability Is the tool open to unauthorised access,
change, or disclosure of information and
therefore susceptible to disrupting the
organisations services?

Stakeholder consultation
As you design or change policies, tools, processes, forms and databases,
consult with others. Be pro-active in seeking out their input and always seek
out advice before you put new developments into place.

Management buy-in
If policies and practices are to succeed in your organisation, they must
receive the support of other managers and employees. Your processes should
also clearly reflect the culture of the organisation. So, which managers
should you consult with when developing HR processes?

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 Other stakeholders
When formulating policy and determining procedures, HR managers need to
take into account the interests of any individual or group who claim to have a
stake in the end of an employment contract. This might include anyone that
affects, or is affected by, the process.

The correct and fair management of HR is not only of interest to managers,

staff and the HR department. Many others might also claim a strong interest
in the way employment contracts are, for example, started and ended. So its
advisable to classify stakeholders in the process and identify strategies for
consultation where relevant.

Groups to consult may include:

unions and other labour organisations
employer groups
tribunals and courts
economists
government departments.

Many areas HR require processes that must be right the first time if the
organisation is to avoid unnecessary conflict. This means setting the
groundwork now and putting in place practices that will prevent problems
later.

Wherever possible, you should encourage stakeholder participation and

feedback as you develop your policies and procedures. Having a well-
established contingency process to deal with problems will strengthen
employee/employer relationships and help avoid the potential legal
consequences of handling them incorrectly.

You will need to understand the demands that can be brought to bear on the
performance of employment contracts. In fact, your people and negotiation
skills might be significantly tested when the time comes to finish an
employment contract, forcing you to step carefully through alternative
dispute resolution pathways. Ensure you have grievance procedures in place
in awards/agreements or organisational procedures.

From an expert
One Human Resource Management consultant has this to offer:
Developing a plan for ongoing consultation may sound like a simple task
and it can be, if all the conditions are right. Unfortunately, in many
organisations theyre not.
Even the word consultation is unheard of in many organisations - let alone
consultation about such a sensitive issue as wages, bonuses or

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 commissions. These kinds of consultations are better run by a neutral
person. If thats to be you, the HR manager its important that you step
back and take a frank look at yourself from the employees point of view,
before starting. If youve not had a good track record in this area before, or
may be perceived to be too much on the side of management, or even if the
HR department is not well respected or trusted, then youd better get
someone else.
Getting a group together can be a hassle at the best of times, let alone staff
whose job it is to be on the road making sales. So its important, that at the
very first meeting you gain agreement on some rules. Things like when and
where is the most suitable time to meet, for how long, how minutes will be
taken and circulated and, of course confidentiality. Where appropriate,
youll also need agreement that members carry out tasks allocated to them,
report and attend regularly. If you can get all this together, then theres a
good chance youll get respect and results from such a group. Your job will
be to keep the ball rolling, ensure that the group continues to move towards
making decisions and recommendations, and most important gain
agreement about what needs to change.
Terry McBride, Trainup Pty Ltd, interviewed May 2003

Think

How would you ensure management buy-in when developing your HR

processes?

Documenting the HR process

Once you have collected and analysed your information, its time to develop
and document your process and tools.

A few tips:
plan before you start to develop the system
make sure the various parts of your systems fit together
design your test plans before you start to build the system
keep changes to your plans under control.

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 Documentation
The documentation for your HR process should clearly state:
Scope of the HR process
o What are the goals and objectives of the process?
o How does it link to organisational goals?
o What HR services does it affect?
o What is the policy statement for the process?
o Who does it apply to?
o Who will it be approved by?
Tasks to be completed
o What are the procedures to be followed?
o Who is responsible for what?
Measures or standards for HR process
o qualitative
o quantitative
Communication plan for the HR process
o announcement
o training
o ongoing support
Monitoring the HR process
o make formal feedback mechanisms available to users
o plan to capture informal feedback
Evaluation plan for the HR process
o questionnaires
o interviews
o audits.

Implementation plan
Your implementation plan should include:
Resource allocation
o time (number of hours or days to complete the
implementation and training tasks)
o budget (money for planning, trailling, production and training)

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 o people (to carry out the various tasks)
o materials (computers, meeting rooms, office consumables
etc).
Schedule
o the tasks to be completed for implementation (eg
programming of HRMIS, trialling, printing of manuals,
communication, training, delivery of manuals, forms etc)
o when (start and finish dates for each task)
o by whom.

Timing

Like everything else, HR processes require time to be implemented correctly

time to prepare for events, to make decisions, to communicate with those
affected and to carry out relevant tasks. Problems commonly arise when
things are done in haste, so ensure that your timeframes are adequate.

For example, you need to give people reasonable notice of events such as
redundancy so that they have enough time to consider their future and make
decisions about alternate employment or redeployment options. Your
organisation may already have guidelines on what constitutes reasonable
notice. If not, you will need to assess the situation and consult your
stakeholders to determine adequate timeframes.

Tip

Its a good idea to have staff (or their representatives) sign-off on new or
revised policies, as evidence that they have been read and understood
them.

Risk management
Risk is the possibility of suffering lossa possibility that exists in all
commercial contracts and transactions. A substantial part of your job is to
identify and minimise the potential risks for your organisation as well as its
employees. This will require your continual vigilance.

Risk management is a rapidly growing practice in its own right, with its own
processes, methods and tools. It provides a discipline to help reduce the fears
inherent in dynamic decision-makingespecially when those making the
decisions are under pressure.

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 You can use risk management techniques in HR processes to:
continuously anticipate potential problems (remember Murphys Law
anything that can go wrong, will go wrong, at the worst possible
time)
assess the risks to determine which ones require you to develop a
response
implement strategies and processes to minimise those risks.

Minimising risk

Here are some simple guidelines for minimising risk when developing HR
processes.
Have a wide perspective of your processes. Recognise the potential
value of opportunities that arise, as well as the potential impact of
adverse effects that may come with such opportunities.
Anticipate uncertainties. Uncertainty is not a pleasant phenomenon
to work with, but when dealing with human behaviour, caution is well
advised.
Keep your communication channels open while developing your
processes. Encourage the free flow of informationformal, informal
and impromptu.
Make risk management an integral part of your process. Use risk
management methods and tools a part of your process infrastructure.
Trial the new process or tool first. A limited trial with a smaller
group of employees will identify unanticipated problems and minimise
the negative consequences. See the section below on trialling.
Maintain constant vigilance for slip-ups and errors.
Share the successes. Make the development of employment
contracts a team effort. This means collective ownership of good
practice in all HR processes.

Developing HR tools
Having a considered and documented HR policy and procedure manual
means that despite changes in personnel, the methods of working will be
consistent and reliable.

A familiar way of maintaining quality and controlling organisational practice

is to develop standardised documents for use, including
forms - for gathering and organising data
checklists - for ensuring processes are followed
reports - for recording information.

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 Your evaluation will have highlighted areas that need to improve because
current practices are either inadequate or non-existent. You must now
consider which documents need to be revised and which need to be created.

Documents to publish in your procedure manual might include:

questionnaires (eg for an exit interview)
agenda templates for meetings
sample minutes for recording meetings
format for position descriptions
standard letters, eg letter of job offer
format for employment contracts
statutory declaration forms
checklists for complicated procedures, such as grievance handling
performance review forms
outlines for reports
templates for staff communications
format for training records
selection interview checklists
induction checklists.

Confidentiality
The forms youre developing will often hold a great deal of confidential
information and therefore should be handled carefully. This means storing
them in securely and limiting access to relevant staff. Care is also needed
when using such documents and you would be well advised to treat even the
drafts as confidential. After all, a draft redundancy checklist sent to managers
for feedback could easily be spotted and lead to misunderstanding, conflict
and grievance.

Quality control and standards

Quality is an intangible characteristic of a system. One persons idea of
quality might be another persons impression of chaos.

For employment contracts, the binding dimension for quality is an assurance

that youve checked that the organisation has met all its legal obligations.
After that comes satisfaction that youve met the commercial and cultural
aims of your policies.

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 Benchmarking
The pursuit of best practice is the pursuit of excellence. So how can you tell
what constitutes best practice in management of HR activities? To identify
best practice within an organisation or HR department, you could seek out a
similar organisation with a reputation for excellence and compare your
organisations results with theirs.

This is known as benchmarking. It uses a series of measurements to rank

the quality of performance, set targets and place a value on results. After all,
what gets measured can be managed.

Once you have selected a process to benchmark, you will need to:
decide on the scope of your test
choose relevant measurements
study best practices that will boost performance
judge how appropriate the practices are to your organisation
identify cultural differences that might result in performance
difference between your organisation and the benchmark organisation
plan and implement changes
measure results.

Best practice leads to best performance and the opportunity to gain strategic,
operational and financial advantage. But in benchmarking your processes, be
careful of simply choosing an organisation that has few disputes. This may be
the result of accommodating too many demands that dont comply with the
organisations policies or procedures. Instead, you might look at
performance appraisal results, technological efficiencies, staff turnover,
number of individual employment contracts signed or surplus staff employed.

Additional information, which may be used to compare your procedures to

those of other organisations, can be gathered through published case studies,
industry award ceremonies and general intelligence gathering.

Communication, training and support

Your implementation plan will need to describe your methods for
communicating the changes to management and staff, and providing
appropriate training and support for the people who implement or are
affected by them. This could include:
Delivery of change announcement to management and staff -
possibly by the CEO if it's a major change.
Information packs distributed to all stakeholders.
Information posters in staff areas.

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 Formal training or briefing sessions.
Coaching or mentoring for individuals.
Performance support tools, eg quick reference cards.
Consultative groups to monitor implementation.

Stakeholder agreement and sign-off

Start by developing a short summary of what you have discovered, covering
key points of your work to date. This summary is a critically important part
of your plan. It will:
crystallise your research
highlight any shortfalls uncovered in your organisations methods
state the risks if improvements are not made
provide a foundation for presenting your options and
recommendations.

You may manage this part of the process in two stages. You could
present your research, the possible options and your recommendation
in a meeting of stakeholders, then later
finalise the documentation for the new or changed HR processes and
tools, and obtain appropriate sign-off prior to implementation.

Trialling the new process

Trialling an HR process, procedure, or tool means that you:
implement it with a small group
evaluate the results
report the results to stakeholders, and
make changes to the process, procedure or tool

before you implement it more widely across the organisation. A limited trial
with a smaller group of employees will identify unanticipated problems and
minimise the negative consequences of these.

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 Seek ongoing feedback
All your planning and preparation should ensure that the processes you
develop are both effective and meet the organisations requirements. You
might even pilot these processes in the HRIS to identify issues and rectify
them prior to implementation. However, the true test will be in the use of
these documents and processes in the workplace.

So once your policies have been rolled out, you should seek feedback as to
how well they work. At this stage, you might find it worthwhile to broaden
the basis for comment by seeking feedback from exiting employees.
Adapted from Open Training & Education Network (2003) Learner's
Guide BSBHR507A TAFE NSW; used with permission

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